Renewable energy? An economic development panacea?

This guy wants Nova Scotia to attract a “major wind-turbine manufacturer” as part of making the province a leader in the renewable energy economy.  Where was this thinking a decade ago or even 5-6 years ago when attracting such a plant was a relatively novel idea?

Now, virtually every U.S. state as well as Ontario and Quebec are in the search for the GEs and the Vestas and I recently read about one of these plants that was given over $150 million in tax and other incentives to locate a plant in a western U.S. state.   Is Nova Scotia going to pony up $150 million for such a plant?  Unlikely.  There was a time when Nova Scotia ponied up $93 million for three Michelin plants and 2,500 above average paying manufacturing jobs but me thinks the appetite for that kind of bold and ambitious move has long since dried up across the Maritimes.

It seems to me that we are well behind the curve in the Maritimes if we want to attract renewable energy manufacturing, R&D and other operations.  The competition for this type of activity will be fierce and I worry that we won’t (can’t) compete.  Maybe we should be moving on to other more novel industries where there is less globla competition.  I am not saying there is no opportunity here but I am saying the competition will be fierce. 

If you contrast that with Nova Scotia raiding Bermuda for financial back offices or New Brunswick trying to attract call centres in the early 1990s, you will see the difference.  In those cases, the jobs were raided right under the noses of the big guys (Toronto economic development folks were scrambling, I am told, after Nova Scotia attracted a half dozen big name financial back offices in around 18 months).  Now, I suspect, that both Montreal and Toronto are all but camped out in Bermuda.

I don’t see the renewable energy sector as a panacea for economic development in this region but I do think there is some opportunity.  Tax incentives to stimulate more use of wind, solar and possibly biomass energy as well as upgrade to energy efficient homes and businesses would stimulate economic activity in the province and also reduce NB Power’s need to burn coal and oil to make peak electricity in the winter.  We could possibly attract some investment into tidal energy (although NS is ahead of NB on this one).

I think there could be some possibility to export wind energy from NB but my gut feeling is the money would be better spent cozying up to Danny Chavez and buying an equity stake in Churchill Falls 2 (he was in the Globe a couple of days ago saying that was his main priority before leaving office).  Pony up a few bucks and get the transmission pipe through NB – secure relatively cheap and clean power for a generation.

Who knows?  I am just quite tired of being last to the party on these sectors.  Somebody yelled data centres a couple of years ago – a full five years after they were becoming a serious economic development opportunity – and there is still virtually no interest here.

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2 Responses to Renewable energy? An economic development panacea?

  1. Anonymous says:

    Good post. I agree that we need to be on the leading edge of developing opportunities.

    Interesting reminder about Michelin and the value returned over the last 35 years for a $93M investment. As you suggest, there is little will today to make such an investment in attracting a quality company like Michelin. However, we somehow rationize bailing out a floundering construction company, a failing yarn factory and a mismanaged (corrupt?) branch of the Caisse with similar scales of public funds.

    We need to take ED seriously. I am tired of the feel good spin like this new license plate slogan will put us on the path to self sufficiency. Can we make effective economic development an upcoming election issue or will we be dealing with insurance rates, tolls?

  2. Cod Father says:

    That’s an awesome proposition! Invest in a pony up for the Anglo-Saxon route for the Lower Churchill Hydro Power.

    Too bad there couldn’t be incentives to build step-up natural gas fired generating facilities for when the wind stops blowing so electricity supplies could be secured.

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